The first thing to check is that the transmitter/receivers in both the mouse, keyboard and the USB section are talking to one another on the same frequency. This is usually done by pushing a small switch on the USB part and then similar small buttons on the keyboard and mouse. Look at the instructions to find out where the switches are.
You also need to check if there are any exclamation marks or question marks in Device Manager. You can find Device Manager by right clicking on My Computer and selecting Properties and then Device Manager, Hardware (Vista is slightly different but you can soon find Device Manager by Right Clicking Computer)
If it is faulty then at 10 months old it is still uncer warranty - take it or send it back.